East York Tenants Group

Sometimes we find ourselves in a situation that is beyond our control and have to terminate a rental lease agreement early. In the present economic climate there will probably be an increasing number of renters needing to end their lease/ tenancy agreement early. It could be that laid off or underemployed renters will be seeking less expensive accommodation to survive the downturn in the economy. Some tenants may have found more suitable accommodations and others may be faced with the prospect of becoming homeless due to the economic downturn. Tenants may have to relocate for a new job. It may be that they want to move because of NOISY TENANTS or ‘harassment by a tenant’ and the fact that the landlord is not taking their complaints seriously. Check Municipal Licensing & Standards (Chapter 591 Noise Bylaw) for more detailed information on noise violation. 

A tenant may also be concerned about safety and security in their building if they have been a victim of robbery, burglary or break-in and the landlord has not responded adequately. Or there may be existing tensions or conflicts due to other violations of the RESIDENTIAL TENANCIES ACT such as malfunctioning utilities and outstanding major repairs, or Cockroach and bed bug infestation that the landlord ignores. There violations can make your unit uninhabitable. Naturally tenants would want out of their lease/tenancy agreement as soon as possible. There could also be any number of personal reasons for having to prematurely terminate a tenancy agreement. (Check here for a Sample Lease Agreement). If you find it necessary to break your lease agreement early you should familiarize yourself with the rights and responsibilities of tenants. 

Ending a tenancy agreement

You have to serve notice to the property owner as soon as possible that you do not intend to renew your tenancy agreement. This notice should be in writing and must include the specific date you intend to leave. When you leave you must return the keys for the unit to the property owner.

The table below summarizes specific rules governing the notice period a tenant must give to the property owner:

Source: Landlord and Tenant Board

Website link: http://www.sjto.gov.on.ca/ltb

Early termination of a tenancy

If you are unable to satisfy the requirements outlined in the table above you can face penalties for early termination of your lease/tenancy agreement. You will have to compensate the property owner for the time your unit remains vacant. There are specific guidelines on how tenants can break a tenancy agreement. Go to the Ontario Tenants Rights website and check the ‘How To Break A Lease’ procedure on how to manoeuvre around this predicament. 

It is also recommended that you review the regulations contained in the Residential Tenancies Act for ending a tenancy agreement: how-a-tenant-can-end-their-tenancy-en

If you are experiencing financial hardship and are unable to pay your rent due to the downturn in the economy and might be facing eviction you should acquaint yourself with the Rent Bank Program (City of Toronto) for advice and financial assistance.

http://www.nipost.org/toronto-rent-bank

If you want to terminate your tenancy agreement prematurely and are dealing with a difficult or problem landlord who has committed a violation under the Residential Tenancies Act you can file a  T2 Application with the Landlord and Tenant Board to resolve the issue.  It is recommended that you should seek Legal Assistance on how to proceed.

NOTE – The  ONTARIO TENANTS RIGHTS  website provides extensive information on the legal rights of tenants and landlords across Ontario.  You will also find information on Current Renters News and Issues, Housing and Rental news, and also other useful community links at this site.

How to negotiate your way around this

The circumstances that force a tenant to end their lease prematurely often stress out the tenant and that may in turn overshadow the procedures required to prepare and negotiate a successful termination.  It is to your advantage to use a tactful approach in the negotiations in order to lessen the financial penalty. You should discuss the possibility of subletting your unit with the landlord owner but at the end of the day that option has to be approved by the property owner. If subletting is not an option then you need to be mindful that you will be liable for rental payments if the landlord/property owner is unable to rent the unit immediately. Hopefully the property owner will make every effort to rent the vacant unit promptly.  You should not pay the property owner for ’anticipated loss’ since you don’t know when the unit will be rented. Instead you should negotiate an outcome that benefits you. You should also feel free to request that the property owner provide you with an itemized list of costs related to advertising and renting the unit. Of course, that may raise the possibility of getting caught up in difficult and protracted negotiations with the property owner. Based on the difficulties experienced by tenants we believe that consideration should be given to establishing a ‘tenants boot camp’ pilot project. The goal of such a project is to educate tenants on their rights and responsibilities to both the landlord and fellow tenants and, equally as important, give them a sense of empowerment.

Note on ‘Vacancy Decontrol’ – An incoming tenant should be aware that many property owners benefit from ‘vacancy decontrol’ when a new tenant assumes the lease of another tenant who has terminated a tenancy agreement early. When there is a high turnover in the tenant population there are greater financial benefits to property owners due to ‘vacancy decontrol’ and regulations covering the Rent Increase Guideline. One of our earlier posts covering the issue of ‘Rent Control and Vacancy Decontrol’ addresses this issue in more detail. Briefly, the upshot is that an incoming tenant usually has no way of knowing whether or not the property owner has increased the rent on the advertised unit by more than what is allowed by the Annual Rent Increase Guideline. This seems to be a subtle way of circumventing the Annual Increase Guideline. Even if the prospective tenant is aware of the steep rental increase on the unit there is virtually nothing that tenant can do. This loophole or ambiguity in the Residential Tenancies Act allows property owners to raise the rent to whatever the market will bear. The ambiguity of Vacancy Decontrol in Ontario is captured in this quote:

Under vacancy decontrol sitting tenants are protected from eviction and the amount a landlord may increase the rent of sitting tenants is limited. Upon vacancy, a landlord is free to negotiate a new rent with a new tenant. However, future rent increases are again regulated until the unit becomes vacant. 

Vacancy decontrol thus creates a two-tiered system, one tier with deeply controlled rents for long term sitting tenants and a second tier with higher rents for new tenants.” 

This ambiguity also contributes in large measure to the huge discrepancies often found in rent charged for same size apartments, even within one building. So why does this ambiguity remain?  Once again it raises the question of whether or not affordable housing should be viewed as a fundamental human right, or as a privilege!  Food for thought!

We trust you’ll find this piece on how to prematurely terminate your lease of help in keeping you informed and empowered as a tenant.

Keep informed.  Know your rights.  And protect yourself accordingly!